ATHENS – Greek Prime Minister Kyriakos Mitsotakis has unveiled a €1.6 billion (US$1.87 billion) tax reform package, including sizeable income tax breaks for households with children, in a bid to shore up public support as inflationary pressures and corruption allegations erode his government’s standing.
The reforms, announced during Mitsotakis’ annual economic policy address, are set to take effect in 2026 and will be funded by stronger-than-expected growth, a robust budget surplus and tighter tax collection efforts.
“We recognise that many Greek families are under severe strain. Supporting their disposable income is our unwavering priority,” Mitsotakis told the audience.
Key measures include a two percentage-point reduction in tax rates across all income brackets and the elimination of tax liabilities for low-income families with four children – a move aimed at tackling Greece’s declining birth rate and soaring housing costs. Pension increases are also on the table, while real estate taxes in rural areas will be scrapped to incentivise younger generations to relocate outside major cities.
The policy push comes as Greece seeks to consolidate its post-crisis recovery. After a decade-long debt debacle between 2009 and 2018 that slashed living standards, the economy – fuelled largely by tourism – has nearly regained its pre-crisis size. Yet Greece remains the most heavily indebted nation in the eurozone, and household incomes continue to lag behind the EU average, weighed down by persistent food, energy and housing inflation despite a cumulative 35% hike in the minimum wage.
Mitsotakis’ centre-right New Democracy party has seen its approval ratings slide sharply since June, now polling between 22% and 25%, well below the 41% vote share it secured in 2019. The drop reflects growing frustration over the cost of living crisis and concerns around governance.
As Mitsotakis addressed the Thessaloniki International Fair, thousands of protesters led by trade unions gathered in the northern city demanding higher wages and better living standards – underscoring the political stakes surrounding the reform.
